S&P 500 Futures Rally After Bank of Japan Shock

• Bank of Japan surprises markets by raising the range of the yield control curve.
• Wall Street futures initially fall and then manage to recover.
• The dollar is under pressure, while the yen has a record rise.

The Bank of Japan’s decision to raise the bond yield limit had a strong impact on the markets. Wall Street futures have rallied, erasing previous losses. The yen maintains a historical gain and the dollar falls.

A shock in a supposedly quiet week

The markets in Asia closed negative affected by the decision of the Bank of Japan (BoJ), with the Hang Seng losing 1.33%. In Europe, the main stock markets are in the red, although far from the lows and with losses on average of 0.35%. Wall Street futures rallied after hitting new lows in weeks after the BoJ shock. The S&P 500 points to an open unchanged from Monday’s close, while Dow Jones futures rise 0.10% and Nasdaq futures fall 0.13%.

The bank of japan surprised markets on Tuesday by announcing a change in its bond yield control policy, moving the ceiling on the 10-year bond yield to 0.5% from 0.25%. The decision triggered a yen rally across the market, which had an impact on other currency pairs. The market reaction reflects the notion that this is a strong signal of a change in the BoJ’s ultra-accommodative policy, ahead of schedule, which was in April, at the time of the change of central bank authorities.

USD/JPY is falling more than 3% and reached as high as 131.99, the lowest since August and 500 pips below the level of hours ago. The dollar, despite the collapse against the yen, initially managed to rise against the rest of its rivals, as a result of the climate of risk aversion and the rise in Treasury bond yields. But in hours of European trading, the dollar began to lose ground. The DXY falls 0.70% and is below 104.00. EUR/USD is trading positive and approaching the key resistance zone of 1.0650.

met in Germany that the producer price index fell 3.9% in November, a larger drop than expected. The Reserve Bank of Australia published the minutes of the last meeting, when it raised interest rates by 25 basis points. It shows that pausing the raises was analyzed, but ended up voting for a raise.

Heico it rises approximately 2% in the previous one after reporting higher sales in the third quarter. Among the companies that will present results on Tuesday are NikeGeneral Mills, fedex, Oracle and Factset. In the US, data on housing starts and construction permits for November will be published. In Canada retail sales report. Hungary’s central bank is expected to keep interest rates unchanged at 13% on Tuesday.

The Treasury yields rise significantly although they have moved away from the maximum. The 10-year bond reached 3.71%, the highest since the end of November, and then fell back to 3.65%. The German 10-year bond climbed to 2.29%, the highest level in a month and a half.

The cryptocurrencies they are rising after having had a sharp decline after the Bank of Japan. Bitcoin advances 1.50% and trades on $16,800, while ethereum he recovered the $1,200. The Prayed climbs despite rising Treasury yields and trades above $1800, while silver approached $24.00 before correcting lower.

The prices of Petroleum They are rising on Tuesday, supported by rising commodities, a weaker dollar and improving equity markets. The WTI barrel climbed above $76.00. API oil inventory data will be released later Tuesday in the US. The European Union agreed on a maximum price for gas. The gas market correction mechanism will be temporary and will work for one year.

technical levels